The firm you founded currently has 13 million shares, of which you own 7 million. You are considering an IPO where you would sell 3 million shares for $24 each. If all of the shares sold are from your holdings, how much will the firm raise? What will be your percentage ownership of the firm after the IPO? Firm raises $0, You will own 30.8% of firm Firm raises $72 million, You will own 53.8% of firm Firm raises $0, You will own 53.8% of firm Firm raises $72 million, You will own 0% of firm
The firm you founded currently has 13 million shares, of which you own 7 million. You are considering an IPO where you would sell 3 million shares for $24 each. If all of the shares sold are from your holdings, how much will the firm raise? What will be your percentage ownership of the firm after the IPO? Firm raises $0, You will own 30.8% of firm Firm raises $72 million, You will own 53.8% of firm Firm raises $0, You will own 53.8% of firm Firm raises $72 million, You will own 0% of firm
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:The firm you founded currently has 13 million
shares, of which you own 7 million. You are
considering an IPO where you would sell 3
million shares for $24 each. If all of the shares
sold are from your holdings, how much will the
firm raise? What will be your percentage
ownership of the firm after the IPO?
Firm raises $0, You will own 30.8% of firm
Firm raises $72 million, You will own 53.8%
of firm
Firm raises $0, You will own 53.8% of firm
Firm raises $72 million, You will own 0%
of firm
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